The Republican journal., 1887-06-23
Announced June 6. 1887. supreme Judicial
Court of Maine. Waldo County.


PETERS, c. j. The facts OF this and
most of its questions Were before the court in
the ease Of Bc!fdSt. Dr., Il. II. Co. Z. B@fdSt.
- Manc i43. The preferred Stockholders OF
the Company are now compainantS against the
Company and its directors, seeking to obtain
through a court of equity dividends on their
stock.
On March %. 1856, when this bill was brought.
the followin. facts existed: The road was. and
since May 10. 1871. had been, leased TO the
Maine Central Railroad Company, the lease to
| run until Alay 10. 1921. the lessee TO operate the
road during the intervening period at its rWn
risk and expense. TO keep il in repair and pay
all taxes thereon, and pay rent of Ss6,000 per
year
Tn" common stock amounts TO $50 400. and
the preferred to >2Gl.,Un. all paid in. amount
ing al par value 10 SGiS 100. The road cost
l.o10.oto. The means expended for i!> con-
struc ipli. iic-ie> stock paid in consisted of Il
bonded debt Of ~l.,O.00o. a iloatnw debt of
Slao0oo. and an Indebtedness to the city of
Belfast. lie principal stakeholder. Of SOL 800
for borrowed money. The bonded debt is
secured by mortgage on the road. the principal
of which Will mature May II, 1850. having eN-
listed IN The same form since May IT, 1870. the
interest thereon having been regularly paid
>em-annunlly. 1t i> the only debt existing
against the Company. nor i it pretended that
any other rim ari-r against The toml,any from
this time to the end OF the lease in l921. The
Company expenses are triilinc. being only
such a> aye necessary 10 keep mp Il formal
corporate organization. The floating debt had
been Wno,Iy ext ingui>hcd the borrowed money
paid. and there were in the treasury S22, -
of cash assets. all from rents received under
the lease. at the date of This complaint.
At That lime the directors had laid aside olit
Of nIoncN un hand Sl3.3o0 which. With future
rents. n4ht Is" available a> Il reserve fund
WhcrrWih To pay the bonded debt when it
natures in 1880. Eui before this appropriations
which can casil, he recalled the companantS
had used due diligence. in the WAY of demands.
notices. motions and other movements. TO Oh
tain from The directors a recognition of their
equitable right to :; di"i'ich'!.
Three questions arise the farts. fiisf:
Are the preferred stockholders entitled 10
annual dividends. if earned: >rroad: At tn"
date OF The hi! had dividends been earned?
Ihffd: l. This Il ease authorizing the court 10
rrTIir" the directors to declare Il div i.lnnd:
" hiic all Of these questions We're harly be
fore the court in The former ease. to be directly
adjulic;itr'l. still they were necessarily involved
in il. and we then considered them carefully.
hoping the parties would he satisfied with the
results which We're forc>hlioweI. without pro-
rec'iin9 with further litigation. We then indi-
caied thai We were Of the opinion that tie pre-
ierrcH stockholders would be entitled TO divi-
drnd- after The floating debt became paid. and
after con>i'Iern" he questions anew. we III this
time see nothing to require lis 10 change that
opinion.
N' ~, l'''7'''' ","'' '''., 'i'
ohliga'itn of the Company 10 the priv iIegcd
shares rests on bylaw is. and that the bylaw
t'i""Nh'e 'iic 'eiHi> .i il roii'I'c' b''iNtch
'o'nl'anH ana 9t"'hh"'''er>. we nave alr'ahE
80 r. r,e'',r"i .,,,...,
preferred stock shall first be mati, >emi-ann,al-
II from the net earnings of the road. not cN-
Fee.lii@ SlN per '"htulh per ahhilm. altef Whirh
'iNi'ieil,' II mere sii'ii remain il >ufplu>' Il
'iNlnchh Hii"ii tr made on ne hoiI-ireIerred
I,,.l
>t"'h up t" u 'ihG per t'hi per alisonl' ana
>n"hIi Il surplus lhttl remain "l irt earnings
'ii'f pom ol Slhi nl\lutl's. III any one YEAR
inc same >ha'i hH 'ilNideh pr" rat" on All the
slHth.
the construction "hich We gave TO this roii-
tract ia tiic previous fl>". WAS certainty very
llhcra' lGW1fdS the holders ol the romnon
>",'h' an" an ine .'odht> were W'l3hc'' III iheif
''i''i III lhe 'cfi>"h ,!iii tlie prtitrred STOCK
Wa7 h"ii-ctihutN'. iiad me bylaw merely
pro, h'rl i'i'' tne preferred shares >houid re
ei'hi'" 10 CIV ioth" ol >iN per cent 'i''aiiy
ii,'' ''i i''''' ''n' an "i one year W"""
t'''' '''h l'aNa'' oiil ol lh' earnings oi SUD
>eiueht years ana thefc Woii'" nave heth ~"
o'''sio" ior inc lrt>enl foItsoNeIsE hetNeeh
'ir !" " ''>>'s oi s''rh,'"lt'.r>. mere i no
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